S 1 5 5 7 B 9 0 1 -2 SAMPLE PROBLEM 13 14 45 46 47 48 49 50 51 52 53 A pair a designer jeans is sold by the retailer for $125.00. The Manufacturer sells them for $7.00 to the importer. It costs the manufacturer $5.00 to produce the jeans. The Importer sells the jeans for $10.00 to the Wholesaler who then sells them for $50.00 to the Retailer. Calculate the Margin $ and Margin % for each partner in the distribution channel? Manufacturer $ 2.00 28.6% Importer $ 3.00 30.0% Wholesaler $40.00 80.0% Retailer $75.00 60.0% Channel Margin $ and Margin % Distribution Channel Selling Price and Channel Margin $ Distribution Channel Selling Price Selling Price $ Cost of Goods Sold Manufacturer Importer Wholesaler Retailer 7.00 $ 10.00 $ 50.00 $ 125.00 5.00 $ 7.00 $ 10.00 $ 50.00 2.00 $ 3.00 $ 40.00 $ 75.00 30.00% 80.00% 60.00% $ Channel Margin $ $ Cost of Goods Sold Channel Margin $ Margin % Margin % 28.57% Wholesaler Retailer $ Manufacturer Importer Wholesaler 7.00 $ 10.00 $ 50.00 $125.00 5.00 $ 2.00 $ 28.57% $ $ 7.00 $ 10.00 $ 50.00 3.00 $ 40.00 $75.00 80.00% 60.00% 30.00% 54 PRACTICE QUESTIONS 55 1 A Manufacturer produces vacuum cleaners. The cost to Manufacture each unit is $175. They sell directly to the Retailer for $250. Calculate the Margin $ and Margin %? 56 2 A wholesaler sells vacuum cleaners to retailers. Their Cost of Goods sold for each unit is $155. The wholesaler sells them to the Retailer for $205. Calculate the Wholesaler Margin $& %? A pair a designer jeans is sold by the retailer for $225.00. The Manufacturer sells them for $27.00 to the importer. It costs the manufacturer $8.00 to produce the jeans. The Importer sells the jeans for $50.00 to the Wholesaler who then sells them for $100.00 to the Retailer. Calculate the Margin $ and Margin % for each partner in the distribution channel? 57 3 P&G want to sell an new air Freshener. It costs $1.50 to Manufacture. P&G margins are 25%. It will then be sold to a wholesaler who earns a 10% margin and then to the retailer who earns a 25% Margin. Calculate the Price along the distribution Channel and the final Retail Price? 58 4 59 60